ECON 1011 Lecture Notes - Lecture 18: Fixed Cost, Variable Cost, Marginal Product
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Types of costs: fixed cost (fc) fixed input, capital gives us our fixed cost (k gives fc) (also shown as r = rent, variable cost (vc) variable input. Labour gives us our variable cost (l gives vc) (also shown as w = wage) Short run production function: k is fixed, l is variable, the graph of q(l) with q on the y-axis and l on the x-axis. Then we draw the inverse graph l(q), with l on the y-axis and q on the x-axis. We then take the inverse graph above and multiply it by wage (w), producing the graph w*l(q) with w*l (in dollars) on the y-axis and q on the x-axis. Types of cost curves: total cost (shown above) Implies marginal cost and average cost: marginal cost. Therefore, the marginal cost is the slope of the cost curve. Add all values and divide by the number of values. Total height in the room = 12,648 cm.
